What Brexit Means

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Perhaps the most telling article about Great Britain’s vote to leave the EU notes the generational divide the vote entailed.   The youth enjoy being able to work in any of 28 countries, with opportunities that are European wide rather than limited to a small island that once was a great power.  The older folk want to harken back to some glorious past when Great Britain was a major power, and believe that on it’s own it can be that again.  It can’t.  This vote represents a nostalgic backlash from those who want a world that exists no more.   It is driven by the same forces that propel Donald Trump and right wing nationalists everywhere – a distaste for the world globalization and the information revolution has given us.   The focus is often fear of foreigners or Islamophobia, but the root cause is a desire to escape the reality of a changing world.

So what does this vote mean?  What comes next?  First, some background.  Great Britain originally stayed out of the European Coal and Steel Community (1952) and European Economic Community (1958) because it believed it’s status a leader of the Commonwealth – an organization of former British colonies – put it’s interests outside continental Europe.  By 1963 as increased trade and cooperation propelled the European economies forward while Britain languished, they realized they were wrong.

Alas, in both 1963 and 1967 their application to joint the then six nation European Community was vetoed by French President Charles De Gaulle.  De Gaulle felt the British were a “Trojan horse” for American influence, and that their weak agricultural sector made them a poor fit.   Britain’s relative decline continued until in 1973 they finally gained ascension to the EC, along with Ireland and Denmark.

degaulle

DeGaulle’s “Non!” thwarted Britain’s first two attempts to join the EC

That started a process of integrating their economy with that of the rest of Europe, but the relationship has always been rocky.   De Gaulle was right about the impact of the weak agricultural sector, which forced Britain to pay a lot more into the EC than they got back.  That was remedied by a “rebate” system put in place in 1984.  But as Europe moved to a single currency and deeper integration – a kind of loose federalism — the British resisted. They were able to opt out of the currency, and it has been common for Britain to secure an opt out or to water down EU proposals over the years.  Many times pro-EU folk have thought they might be better off without Britain in, though others (including myself) believe that the British exercised a positive role in making sure change was not too fast.

(A note on acronyms – the EEC became the EC in 1967 when they achieved a customs union, and then the EU in 1994 when the Treaty of European Union, which created the common currency implemented from 1999-2002, went into effect.  The now EU started with six members in 1958, 9 in 1973, 10 in 1980, 12 in 1986, 15 in 1995, and now has 28 member states – soon to be 27).

But the British wariness of giving too much authority to the continent remained.    Still, most thought that given the interests of London banks and British business, the UK would adopt the Euro eventually.  The Euroskeptics were always loud with their silly conspiracy theories about Germany and the like, but no one thought they’d accomplish this.    Nonetheless Britain has always been a reluctant member of the EU, seduced by its imperial past and island isolation.

sturgeon

Scotish first Minister and SNP leader Nicola Sturgeon says Scotland will pursue independence from the UK so it can rejoin the EU.

So what does this mean?  It could mean the breakup of the United Kingdom.  While England and Wales voted to leave, Scotland and Northern Ireland voted overwhelmingly to remain.  Scotland is likely to pursue independence in order to rejoin, while it is possible (though not likely) that Northern Ireland will try to unify Ireland to stay in the EU.  It also means that the UK is likely to endure some economic difficulties.   Many businesses will move to the continent so they can be in the union (which makes trade, investment, and the like much easier), and the British will learn that they really can’t go it alone – their economic well being is intertwined with Europe.

It is unlikely that this will be replicated elsewhere in Europe.  The benefits and idea of Europe is too entrenched, and while anti-EU parties sometimes get protest support, they never have had close to the kind of appeal of the British Euroskeptics – and even they just barely won.  More likely the EU will use this as an impetus to reform its own practices to make subsidiarity real (more power to regions and localities, less emphasis on centralization) and there may be less willingness to bring in refugees, given the xenophobic backlash that’s caused.

In the long run, however, Brexit will demonstrate that the world has indeed changed.  Sovereignty is obsolete, states are so linked and intertwined that no one can go it alone.  In Europe, care will be taken to make sure that Britain doesn’t suffer too much, and that British markets remain open to European goods.  I suspect that within a decade Britain will rejoin, though the EU will take away their ability to opt out of the Euro and other regulations.  The economic necessity of being “in” will be clear; the emotional nationalism of the vote to leave will be seen as a momentary lapse of reason.

momentary

It may have been necessary though.   It’s hard for people to let go of a way of thinking that has defined the past few centuries – the fading era of “nation states.”  The information revolution, new technology and globalization have already erased much of the power of borders and national laws.  It is in people’s interest to build cooperative institutions that transcend the state.

But therein lies a lesson.  Replacing the sovereign state with a more powerful bigger bureaucratic state is not the solution.  If the EU is to survive, it must recognize that this same technological revolution empowers localities, regions and individuals.  Power should be decentralized rather than centralized.  Yes, monetary policy, banking regulations and many aspects of the economy need supranational oversight.  But much of what states have done can now be localized.  Decentralization has to be more pronounced than centralization.  If the EU can do that – move to a Europe of regions, with stronger communities and a sense of local control – it could be a model for the kind of political organization that can work in this brave new world of globalization and technological change.

 

 

 

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  1. What Brexit Means — World in Motion – wordupdate

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